Commercial banks lend 4% loans to agriculture sector – NBS


Story by Kayode Tokede

The National Bureau of Statistics (NBS) has said banks lend four per cent of their total loans to agriculture sector despite efforts by the government and Central Bank of Nigeria move to improve the non-oil sector.

The bureau in its ‘selected banking sector’ data for second quarter (Q2)  said banks lend a total of N15.1 trillion as loans in the second quarter of 2019, out of which N636 billion was given to agriculture sector.

There was also no significant difference in loans to the agriculture sector between Q1 and Q2 2019. In each, only 4.20 per cent of the total loans were given to the agriculture sector.

In the first quarter, a total of N15.2 trillion was given as loans with agriculture getting only N638 billion.

The Industry and Service sectors got the highest loans from Nigerian banks in the two quarters.

To ensure Nigerian farmers are able to access loans, despite the lack of support from private banks, the central bank introduced the Anchor Borrowers Programme (ABP) in 2015. The ABP also aims to achieve financial inclusion by helping farmers have easy access to credit.

The loans are targeted at smallholder farmers engaged in the production of identified commodities across the country.

The farmers are expected to cluster in groups/cooperative(s) of between five and 20 for ease of administration.

The CBN governor, Mr. Godwin Emefiele in his five-year policy thrust said “we launched the ABP, which has improved access to finance for over 1million small holder farmers, who are leading our efforts to improve cultivation of agricultural commodities, such as rice, tomatoes, fish, cotton and palm oil.

“The ABP also enabled agro-processors and manufacturers to source their inputs from local sources, rather than relying on the importation of these items. We also deployed other intervention facilities such as the Commercial Agricultural Credit Scheme, and the Real Sector Support Fund.

“These funds were used to channel single digit interest loans through our Deposit Money Banks and other Participating Financial Institutions to beneficiaries to support improved growth in the agriculture and manufacturing sectors.

“The effectiveness of these interventions in supporting the growth of our local industries, has been supported by our foreign exchange restrictions on the importation of items that can be produced in Nigeria.

“We also embarked on measures to discourage smuggling of restricted items into the country, by imposing restrictions on the use of financial institutions in Nigeria by identified smugglers, as their activities undermined the growth of our local industries. These measures are aiding our efforts to support local cultivation of goods in areas such as cotton, rice, palm oil etc.”


Please enter your comment!
Please enter your name here